Diageo may change damaged name, plans Johnnie Walker relaunch and fights minimum pricing

The Daily Telegraph has reported that an item on the agenda for the Diageo’s forthcoming AGM is on changes to its articles of association – which the meeting will be asked to pass – including: ‘Change of name… the New Articles enable the directors to pass a resolution to change the company’s name’.

Diageo: the name and the self-inflicted damage

The company deny that a change of corporate identity is under consideration but, as the online Daily Telegraph asks, in that case why is the item on the agenda?

Of course the name has always been both ridiculous and unpopular, carrying no evocation of the drinks the giant worldwide corporation produces and sounding more like an IT or business consultancy.

That said, the name is now at least well established and people have stopped thinking about how daft it is, simply associating it with the drinks multinational.

The question is, do Diageo consider that the brand has been damaged? Certainly the name has taken some heavy hits – brought about by its own actions.

There has been the association of the brand with the social irresponsibility of the company’s abandoning of the Johnnie Walker bottling plant in the long-loyal town of Kilmarnock. This was done for no reason other than the improvement of already fat profit margins.

Then there have been the steady disclosures on the company’s whisky-making and business practices which For Argyll has highlighted in an earlier piece: Diageo: the real issue is the Scotch Whisky industry. Entering ‘Diageo’ in the Search on this page will throw up a series of stories on aspects of the company’s actions which give cause for concern.

Diageo: the plan to relaunch Johnnie Walker

This plan is an aggravated insult to Kilmarnock – going for a multi-million pound budget relaunch of Johnnie Walker when Diageo has abruptly severed the historic conection between the whisky and the town. The company has thrown 700 workers out of work in a single modest town, in the midst of the worst recession and the unprecedented debt levels faced by the UK.

Today’s Daily Record has revealed the receipt of a leaked document on the relaunch plan. Diageo has commissioned a series of filmed advertisements designed to try to re-glue the multinational company to its ‘Scottish’ associations. The series is to feature a left-field chef called Bruce Campbell and a casting agency is to audition actors in Glasgow tomorrow (1st October) for the role of Campbell. Shooting is scheduled to begin on 9th November.

All of this smacks of panic at the awareness of a damaged brand – and it is a damaged brand, damaged at the company’s own hand. The Greeks called it hubris – seduced by a sense of invincibility into stepping beyond a point the Gods would accept.

And there’s more to come.

Campaign against minimum pricing of alcohol

There is the matter of the measure to be introduced by the Scottsh Government to try to counter binge drinking by imposing a minumum price on the sale of acohol, predicted as 40p a unit.

The Scotch Whisky Association, virtually synonymous with Diageo which owns 40% of Scotch whisky production and has its CEO, the increasingly shrill Paul Walsh as Chair of the Association – is opposing the move. Concern has been expressed by the equivalent trade associations of ireland and America. The sense is being conveyed of international concern and opposition to the proposed measure.

But wait. Diageo is the biggest drinks company in the world. It owns the biggest of the Irish brands including Guinness and Bushmills whisky. It is America’s biggest drinks business.

It would be naive not to consider that Diageo, whose interests are centrally affected by the proposed legislation, is not unconnected with any of these protests.

It is being said that minimum pricing will affect the sales of Scotch whisky, one of this country’s cultural touchstones. This is widely accepted to be misleading. Scotch whisky and single malts are not the low rent products that binge drinkers use to wipe out on. They are quality products and their price and branding already put them largely beyond such uses. Their market is also described as ‘recession resistant’ and is equally able to absorb a degree of price rise without serious sales losses.

The alcohol products wbose sales are likely to be affected by minimum pricing are the so-called ‘alcopops’ – like Diageo’s Smirnoff Ice – and the cheap Vodka which Diageo produces and has been energetically marketing in advance of the forthcoming legislation. Such drinks are the popular route to public oblivion by the largely urban binge drinking generations.

These are the products which Diageo commercially wishes to protect from minimum pricing.  The company’s various manifestations, through the Scotch Whisky Association and through its influence in the Irish and American trade organisations, are forming a chorus of protest.

Focusing on Scotch, as a potent talisman, is more likely to attract public support than openly campaigning to protect cheap vodka against minimum pricing. That would not push the buttons of popular sentiment anything like as effectively. But that is the battlefield.

Anybody got any good ideas for the change of name under consideration?